Thursday, November 10, 2016

Market comment

Took off the rest of my leverage this morning. Thank you, Donald Trump, for paying this year's tuition, my dental expenses, and my vet bills. And some booze money, which I'll need.

Yesterday the S&P surged, but I suspect a lot of it was driven by hasty "oh shit" sector reallocation into a somewhat too-thin book, so now that the big money is going to want to also rotate out of Hillary stocks, it might be a while before S&P has the setup in its underlying to break out of its range. After all, $TRAN is +3SD with an RSI(10) of 80 and SPY is +2SD, and they might have gotten there too fast.

I'm a bit bummed that Horizons killed off a few of its leveraged ETFs in the past couple years. Copper, for example, has flown much too far and with no confirmation from silver or oil: I'd like to short the fuck out of it, but is gone (if it ever existed - I think it did).

Why short copper?

Well, if your long thesis is that Donald is going to build infrastructure despite an anti-spending congress, why do you think the infrastructure is going to be wiring? And just how much of a copper shortage does the world face, anyway? And isn't it Chinese demand that drives copper?

And if your thesis is that with Trump in the White House we're closer to the end of the expansion, which means higher inflation, then why don't you perhaps wait a bit til he's actually inaugurated and we can get a feel for what policy he's really going to pursue?

It's still just a crackhead-driven market.

$UST10Y and copper have moved too frickin' far to fast, and I'd love the opportunity to lean against either move. But as it is, all I can do for the time being is hold my S&P single longs, hold some cash and wait for opportunity, and begin an experimental short of the gold miners.

GDX is close to a fat load of pivots, and anyway it should also tank if either the S&P has finished its upmove or the "inflation wooh!" trade finishes. Also, the positions taken during the pre-election surge should start getting unwound by now, I think.

Oh look, QQQ's already breaking down.

1 comment:

  1. If you already want to guess what policies are going to be, you can try and read what's on It's a .gov domain, so it's post-election talk.

    Includes stuff like "Modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation – and beyond" , which sounds not like Trump but like a Republican. Seems they won't keep their grubby little government hands off medicare.